National Health Reform

A Healthier Future for all Australians - Final Report June 2009

Driving Quality Performance

Leadership and systems to achieve best use of people, resources and evolving knowledge

Strengthening the governance of health and health care

87. To give effect to a national health system, we recommend that First Ministers agree to a new Healthy Australia Accord that will clearly articulate the agreed and complementary roles and responsibilities of all governments in improving health services and outcomes for the Australian population.
88. The Healthy Australia Accord would incorporate the following substantial structural reforms to the governance of the health system:

88.1

The Commonwealth Government would assume full responsibility for the policy and public funding of primary health care services. This includes all existing community health, public dental services, family and child health services, and alcohol and drug treatment services that are currently funded by state, territory and local governments.

88.2

The Commonwealth and state and territory governments would move to new transparent and more equitable funding arrangements for public hospitals and public health care services as follows:

• The Commonwealth Government would meet 100 per cent of the efficient costs of public hospital outpatient services using an agreed casemix classification and an agreed, capped activity-based budget;
• The Commonwealth Government would pay 40 per cent of the efficient cost of care for every episode of acute care and sub-acute care for public patients admitted to a hospital or public health care facility for care, and for every attendance at a public hospital emergency department; and
• As the Commonwealth Government builds capacity and experience in purchasing these public hospital and public health care services, this approach provides the opportunity for its share to be incrementally increased over time to 100 per cent of the efficient cost for these services. In combination with the recommended full funding responsibility by the Commonwealth Government for primary health care and aged care, these changes would mean the Commonwealth Government would have close to total responsibility for government funding of all public health care services across the care continuum - both inside and outside hospitals. This would give the Commonwealth Government a comprehensive understanding of health care delivery across all services and a powerful incentive - as well as the capacity - to reshape funding and influence service delivery so that the balance of care for patients is effective and efficient.

88.3

The Commonwealth Government would pay 100 per cent of the efficient cost of delivering clinical education and training for health professionals across all health service settings, to agreed target levels for each state and territory.

88.4

The Commonwealth Government would assume full responsibility for the purchasing of all health services for Aboriginal and Torres Strait Islander people through the establishment of a National Aboriginal and Torres Strait Islander Health Authority. This would include services that are provided through mainstream and Community Controlled Health Services, including services that are currently funded by state, territory and local governments.

88.5

The Commonwealth Government would assume full responsibility for providing universal access to dental care (preventive, restorative and dentures). This would occur through the establishment of the 'Denticare Australia' scheme.

88.6

The Commonwealth Government would assume full responsibility for public funding of aged care. This would include the Home and Community Care Program for older people and aged care assessment.

88.7

The assumption of greater financial responsibility by the Commonwealth Government for the above health services would be met through commensurate reductions in grants to states, territories and local governments and/or through changes to funding agreements between governments.

88.8

These changes to roles and responsibilities allow for the continued involvement of states, territories and local governments in providing health services.

88.9

The Commonwealth, state and territory governments would agree to establish national approaches to health workforce planning and education, professional registration, patient safety and quality (including service accreditation), e-health, performance reporting (including the provision of publicly available data on the performance of all aspects of the health system), prevention and health promotion, private hospital regulation, and health intervention and technology assessment.

89. We believe that there is a real need to further improve the responsiveness and efficiency of the health system and capacity for innovation. We agree that greater consumer choice and provider competition and better use of public and private health resources could offer the potential to achieve this through the development of a uniquely Australian governance model for health care that builds on and expands Medicare. This new model is based on the establishment of health and hospital plans, and draws upon features of social health insurance as well as encompassing ideas of consumer choice, provider competition and strategic purchasing. We have given this new governance model the working title, 'Medicare Select'.
90. We recommend that the Commonwealth Government commits to explore the design, benefits, risks and feasibility around the potential implementation of health and hospital plans to the governance of the Australian health system. This would include examination of the following issues:

90.1

The basis for determination of the universal service entitlement to be provided by health and hospital plans (including the relationship between the Commonwealth Government and health and hospital plans with regard to growth in the scope, volume, and costs of core services, the process for varying the level of public funding provided to the health and hospital plans for purchasing of core services; and the nature of any supplementary benefits that might be offered by plans);

90.2

The scope, magnitude, feasibility and timing of financial transfers between state, territory and local governments and the Commonwealth Government in order to achieve a single national pool of public funding to be used as the basis for funding health and hospital plans;

90.3

The basis for raising financing for health and hospital plans (including the extent to which transparency should be promoted through use of a dedicated levy or through publicly identifying the share of consolidated revenue that makes up the universal service entitlement);

90.4

The potential impact on the use of public and private health services including existing state and territory government funded public hospitals and other health services (incorporating consideration of whether regulatory frameworks for health and hospital plans should influence how plans purchase from public and private health services including whether there should be a requirement to purchase at a default level from all hospitals and primary health care services);

90.5

The approach to ensuring an appropriate level of investment in capital infrastructure in public and private health services (including different approaches to the financing of capital across public and private health services and the treatment of capital in areas of market failure);

90.6

The relationship between the health and hospital plans and the continued operation of the Medicare and Pharmaceutical Benefits Schemes (including whether there should continue to be national evaluation, payment and pricing arrangements and identifying what flexibility in purchasing could be delegated to health and hospital plans concerning the coverage, volume, price, and other parameters in their purchasing of medical and pharmaceutical services in hospitals and the community);

90.7

The potential role of private health insurance alongside health and hospital plans (including defining how private health insurance would complement health and hospital plans, the potential impact on membership, premiums, insurance products and the viability of existing private health insurance; and any changes to the Commonwealth Government's regulatory, policy or financial support for private health insurance);

90.8

The potential roles of state, territory and local governments under health and hospital plans (including issues related to the handling of functions such as operation of health services, employment of staff, industrial relations and the implications for transmission of business and any required assumption of legislative responsibility by the Commonwealth Government related to these changed functions, together with the operation by state and territory governments of health and hospital plans);

90.9

The range of responsibilities and functions to be retained or assumed by Australian governments (and not delegated to health and hospital plans) in order to ensure national consistency or to protect 'public good' functions (including, as potential examples, functions such as health workforce education and training, research, population and public health and bio security);

90.10

The approach to ensuring equitable access to health services in areas of market failure including in remote and rural areas of Australia (including the relevant roles of health and hospital plans in regard to the development and capacity building of a balanced supply and distribution of health services, and the approach by plans to regional and local consultation and engagement on population needs);

90.11

The necessary regulatory framework to support the establishment and operation of health and hospital plans (including issues relating to entry and exit of plans, minimum standards for the establishment of plans, any requirements relating to whether plans are able to also provide health services, and the potential separation of health and hospital plans and existing private health insurance products);

90.12

The development of appropriate risk-adjustment mechanisms to protect public funding and consumers (including potential mechanisms such as the use of risk-adjusted payments by the Commonwealth Government to health and hospital plans, reinsurance arrangements and risk-sharing arrangements related to scope, volume and cost of services covered under health and hospital plans);

90.13

The necessary regulatory framework to protect consumers (including potential requirements around guaranteed access, portability, co-payments, information provision on any choices or restrictions relating to eligible services and health professionals/health services covered under individual health and hospital plans, and measures to regulate anti-competitive behaviours and complaints mechanisms).

Raising and spending money for health services

91. Health and aged care spending is forecast to rise to 12.4 per cent of gross domestic product in 2032-33. We believe that:
    • major reforms are needed to improve the outcomes from this spending and national productivity and to contain the upward pressure on health care costs; and
    • improved health outcomes are vital in promoting a healthy economy through greater productivity and higher labour force participation; and
    • evidence-based investment in strengthened primary health care services and prevention and health promotion to keep people healthy is required to help to contain future growth in spending.
92. We want to see the overall balance of spending through taxation, private health insurance, and out-of-pocket contribution maintained over the next decade.
93. We recommend a systematic mechanism to formulating health care priorities that incorporates clinical, economic and community perspectives through vehicles like citizen juries.
94. We recommend a review of the scope and structure of safety net arrangements to cover a broader range of health costs. We want an integrated approach that is simpler and more family-centred to protect families and individuals from unaffordably high out-of-pocket costs of health care.
95. We recommend that incentives for improved outcomes and efficiency should be strengthened in health care funding arrangements. This will involve a mix of:
    • activity-based funding (e.g. fee for service or casemix budgets). This should be the principal mode of funding for hospitals;
    • payments for care of people over a course of care or period of time. There should be a greater emphasis on this mode of funding for primary health care; and
    • payments to reward good performance in outcomes and timeliness of care. There should be a greater emphasis on this mode of funding across all settings.
We further recommend that these payments should take account of the cost of capital and cover the full range of health care activities including clinical education.
96. We believe that funding arrangements may need to be adjusted to take account of different costs and delivery models in different locations and to encourage service provision in under-served locations and populations.
97. Additional capital investment will be required on a transitional basis to facilitate our recommendations. In particular, we recommend that priority areas for new capital investment should include:
    • the establishment of Comprehensive Primary Health Care Centres and Services;
    • an expansion of sub-acute services including both inpatient and community-based services;
    • investments to support expansion of clinical education across clinical service settings; and
    • targeted investments in public hospitals to support reshaping of roles and functions, clinical process redesign and a reorientation towards community-based care; and
    • capital can be raised through both government and private financing options.
The ongoing cost of capital should be factored into all service payments.

Working for us: a sustainable health workforce for the future

98. We recommend supporting our health workforce by:
    • promoting a culture of mutual respect and patient focus of all health professions through shared values, management structures, compensation arrangements, shared educational experiences, and clinical governance processes that support team approaches to care;
    • supporting effective communication across all parts of the health system;
    • investing in management and leadership skills development and maintenance for managers and clinicians at all levels of the system;
    • promoting quality and a continuous improvement culture by providing opportunities and encouraging roles in teaching, research, quality improvement processes, and clinical governance for all health professionals across service settings;
    • providing timely relevant data on comparative clinical performance and latest practice knowledge to support best practice and continuous quality improvement;
    • improving clinical engagement through mechanisms to formally and informally involve all health professionals in guiding the management and future directions of health reform including establishing Clinical Senates at national, regional and local levels, subject-specific taskforces, and conducting health workforce opinion surveys; and
    • recognising and supporting the health needs of health workers including setting the benchmark for best practice in workplace health programs.
99. To improve access to care and reflect current and evolving clinical practice, we recommend that:
    • Medicare rebates should apply to relevant diagnostic services and specialist medical services ordered or referred by nurse practitioners and other health professionals having regard to defined scopes of practice determined by recognised health professional certification bodies;
    • Pharmaceutical Benefits Scheme subsidies (or, where more appropriate, support for access to subsidised pharmaceuticals under section 100 of the National Health Act 1953) should apply to pharmaceuticals prescribed from approved formularies by nurse practitioners and other registered health professionals according to defined scopes of practice;
    • where there is appropriate evidence, specified procedural items on the Medicare Benefits Schedule should be able to be billed by a medical practitioner for work performed by a competent health professional, credentialled for defined scopes of practice; and
    • the Medicare Benefits Schedule should apply to specified activities performed by a nurse practitioner, midwife or other competent health professional, credentialled for defined scopes of practice, and where collaborative team models of care with a general practitioner, specialist or obstetrician are demonstrated.
100. We recommend a new education framework for the education and training of health professionals:
     • moving towards a flexible, multi-disciplinary approach to the education and training of all health professionals;
     • incorporating an agreed competency-based framework as part of broad teaching and learning curricula for all health professionals;
     • establishing a dedicated funding stream for clinical placements for undergraduate and postgraduate students; and
     • ensuring clinical training infrastructure across all settings (public and private, hospitals, primary health care and other community settings).
101. To ensure better collaboration, communication and planning between the health services and health education and training sectors, we recommend the establishment of a National Clinical Education and Training Agency:
     • to advise on the education and training requirements for each region;
     • to assist with planning clinical education infrastructure across all service settings, including rural and remote areas;
     • to form partnerships with local universities, vocational education and training organisations, and professional colleges to acquire clinical education placements from health service providers, including a framework for activity-based payments for undergraduates' clinical education and postgraduate training;
     • to promote innovation in education and training of the health workforce;
     • as a facilitator for the provision of modular competency-based programs to up-skill health professionals (medical, nursing, allied health and Aboriginal health workers) in regional, rural and remote Australia; and
     • to report every three years on the appropriateness of accreditation standards in each profession in terms of innovation around meeting the emerging health care needs of the community.
     Further, we recommend that the governance, management and operations of the Agency should include a balance of clinical and educational expertise, and public and private health services representation in combination with Commonwealth and state health agencies.
     
     While the Agency has an overarching leadership function, it should support implementation and innovation at the local level.
102. We support national registration to benefit the delivery of health care across Australia.
103. We recommend implementing a comprehensive national strategy to recruit, retain and train Aboriginal and Torres Strait Islander health professionals at the undergraduate and postgraduate level including:
     • setting targets for all education providers, with reward payments for achieving health professional graduations;
     • funding better support for Aboriginal and Torres Strait Islander health students commencing in secondary education; and
     • strengthening accrediting organisations' criteria around cultural safety.
     We recommend additional investment includes the funding of strategies to build an Aboriginal and Torres Strait Islander health workforce across all disciplines and the development of a workforce for Aboriginal and Torres Strait Islander health.
104. We recommend that a higher proportion of new health professional educational undergraduate and postgraduate places across all disciplines be allocated to remote and rural regional centres, where possible in a multidisciplinary facility built on models such as clinical schools or university departments of Rural Health.

Fostering continuous learning in our health system

105. To promote research and uptake of research findings in clinical practice, we recommend that clinical and health services research be given higher priority. In particular, we recommend that the Commonwealth increase the availability of part-time clinical research fellowships across all health sectors to ensure protected time for research to contribute to this endeavour.
106. We recommend greater investment in public health, health policy, health services and health system research including ongoing evaluation of health reforms.
107. We further recommend that infrastructure funding (indirect costs) follow direct grants whether in universities, independent research institutes, or health service settings.
108. We believe that the National Health and Medical Research Council should consult widely with consumers, clinicians and health professionals to set priorities for collaborative research centres and supportive grants which:
     • integrate multidisciplinary research across care settings in a 'hub and spoke' model; and
     • have designated resources to regularly disseminate research outcomes to health services.
109. To enhance the spread of innovation across public and private health services, we recommend that:
     • the National Institute of Clinical Studies broaden its remit to include a 'clearinghouse' function to collate and disseminate innovation in the delivery of safe and high quality health care;
     • health services and health professionals share best practice lessons by participating in forums such as breakthrough collaboratives, clinical forums, health roundtables, and the like; and
     • a national health care quality innovation awards program is established.
110. To help embed a culture of continuous improvement, we recommend that a standard national curriculum for safety and quality is built into education and training programs as a requirement of course accreditation for all health professionals.
111. The Australian Commission for Safety and Quality in Health Care should be established as a permanent, independent national body. With a mission to measurably improve the safety and quality of health care, the ACS&QHC would be an authoritative knowledge-based organisation responsible for:
     Promoting a culture of safety and quality across the system:
     • disseminating and promoting innovation, evidence and quality improvement tools;
     • recommending national data sets with a focus on the measurement of safety and quality;
     • identifying and recommending priorities for research and action;
     • advocating for safety and quality; and
     • providing advice to governments, bodies (e.g. NHMRC, TGA), clinicians and managers on 'best practice ' to drive quality improvement.
     Analysing and reporting on safety and quality across all health settings:
     • reporting and public commentary on policies, progress and trends in relation to safety and quality;
     • developing and conducting national patient experience surveys; and
     • reporting on patient reported outcome measures.
     Monitoring and assisting in regulation for safety and quality:
     • recommending nationally agreed standards for safety and quality, including collection and analysis of data on compliance against these standards. The extent of such regulatory responsibilities requires further consideration of other compliance activities such as accreditation and registration processes.
112. To drive improvement and innovation across all areas of health care, we recommend that a nationally consistent approach is essential to the collection and comparative reporting of indicators which monitor the safety and quality of care delivery across all sectors. This process should incorporate:
     • local systems of supportive feedback, including to clinicians, teams and organisations in primary health services and private and public hospitals; and
     • incentive payments that reward safe and timely access, continuity of care (effective planning and communication between providers) and the quantum of improvement (compared to an evidence base, best practice target or measured outcome) to complement activity-based funding of all health services.
113. We also recommend that a national approach is taken to the synthesis and subsequent dissemination of clinical evidence/research, which can be accessed via an electronic portal and adapted locally to expedite the use of evidence, knowledge and guidelines in clinical practice.
114. As part of accreditation requirements, we believe that all hospitals, residential aged care services and Comprehensive Primary Health Care Centres and Services should be required to publicly report on progress with quality improvement and research.

Implementing a national e-health system

115. We recommend that, by 2012, every Australian should be able to:
     • have a personal electronic health record that will at all times be owned and controlled by that person;
     approve designated health care providers and carers to have authorised access to some or all of their personal electronic health record; and
     • choose their personal electronic health record provider.
116. We recommend that the Commonwealth Government legislate to ensure the privacy of a person's electronic health data, while enabling secure access to the data by the person's authorised health providers.
117. We recommend that the Commonwealth Government introduce:
     • unique personal identifiers for health care by 1 July 2010; unique health professional identifiers (HPI-I), beginning with all nationally registered health professionals, by 1 July 2010;
     • a system for verifying the authenticity of patients and professionals for this purpose - a national authentication service and directory for health (NASH) - by 1 July 2010; and
     • unique health professional organisation (facility and health service) identifiers (HPI-O) by 1 July 2010.
118. We recommend that the Commonwealth Government develop and implement an appropriate national social marketing strategy to inform consumers and health professionals about the significant benefits and safeguards of the proposed e-health approach.
119. Ensuring access to a national broadband network (or alternative technology, such as satellite) for all Australians, particularly for those living in isolated communities, will be critical to the uptake of person-controlled electronic health records as well as to realise potential access to electronic health information and medical advice.
120. We recommend that the Commonwealth Government mandate that the payment of public and private benefits for all health and aged care services depend upon the ability to accept and provide data to patients, their authorised carers, and their authorised health providers, in a format that can be integrated into a personal electronic health record, such that:
     • hospitals must be able to accept and send key data, such as referral and discharge information ('clinical information transfer'), by 1 July 2012;
     • pathology providers and diagnostic imaging providers must be able to provide key data, such as reports of investigations and supplementary information, by 1 July 2012;
     • other health service providers - including general practitioners, medical and non-medical specialists, pharmacists and other health and aged care providers - must be able to transmit key data, such as referral and discharge information ('clinical information transfer'), prescribed and dispensed medications and synopses of diagnosis and treatment, by 1 January 2013; and
     • all health care providers must be able to accept and send data from other health care providers by 2013.
121. We recommend that the Commonwealth Government takes responsibility for, and accelerates the development of a national policy and open technical standards framework for e-health, and that they secure national agreement to this framework for e-health by 2011-12. These standards should include key requirements such as interoperability, compliance and security. The standards should be developed with the participation and commitment of state governments, the IT vendor industry, health professionals, and consumers, and should guide the long-term convergence of local systems into an integrated but evolving national health information system.
122. We recommend that significant funding and resources be made available to extend e-health teaching, training, change management and support to health care practitioners and managers. In addition, initiatives to establish and encourage increased enrolment in nationally recognised tertiary qualifications in health informatics will be critical to successful implementation of the national e-health work program. The commitment to, and adoption of, standards-compliant e-health solutions by health care organisations and providers is key to the emergence of a national health information system and the success of person-controlled electronic health records.
123. With respect to the broader e-health agenda in Australia, we concur with and endorse the directions of the National E-Health Strategy Summary (December 2008), and would add that:
     • there is a critical need to strengthen the leadership, governance and level of resources committed by governments to giving effect to the planned National E-Health Action Plan;
     • this Action Plan must include provision of support to public health organisations and incentives to private providers to augment uptake and successful implementation of compliant e-health systems. It should not require government involvement with designing, buying or operating IT systems;
     • in accordance with the outcome of the 2020 Summit and our direction to encourage greater patient involvement in their own health care, that governments collaborate to resource a national health knowledge web portal (comprising e-tools for self-help) for the public as well as for providers. The National Health Call Centre Network (healthdirect) may provide the logical platform for delivery of this initiative; and
     • electronic prescribing and medication management capability should be prioritised and coordinated nationally, perhaps by development of existing applications (such as PBS online), to reduce medication incidents and facilitate consumer amenity.